BBC Watchdog Highlights UK Lenders Refusing Loans on Spray Foam Properties

November 6, 2024

Legal property experts have warned homeowners against installing spray foam loft insulation amid a surge in lenders refusing mortgages and homes potentially being rendered uninsurable. The issue was raised on BBC Watchdog last week as part of the BBC’s The One Show programme.

Imagine spending thousands of pounds on your home to improve energy efficiency only to find that you’ve made it more difficult to sell now. The BBC has heard from Homeowners whose properties are at risk of severe damage. They are having difficulties remortgaging and selling their homes, and some houses are valued at zero due to the presence of spray foam.

It’s not just the BBC though. Legal and conveyancing experts have also urging people to find alternative ways of insulating their homes.

Experts from law firm mfg Solicitors warned homeowners earlier in 2024, that if they have any chance of selling their property, remortgaging, or releasing equity, they could end up forking out thousands of pounds to remove the spray foam. They have highlighted the importance of homeowners exploring alternative insulation methods to avoid potential financial setbacks and complications in property transactions.

Beverley Clinton, a legal assistant in the firm’s Residential Property Division, said there are two types of spray foam loft insulation: open-cell, which allows moisture to escape, and close-cell, which reduces air circulation.

When used in roofs and lofts, the close-cell insulation can eventually trap moisture around wooden joints, leading to rot. The hardened foam can also warp wooden beams, create mould and release toxic vapours.

Ms Clinton added:

“This type of insulation is very difficult to remove and so many mortgage providers and equity release companies refuse to lend on homes that contain it, even if it has been installed by a reputable firm.

“Surveyors are also becoming more vigilant with this type of insulation and insurance companies can refuse to insure properties that have it.”

Homeowners are urged to consider the potential consequences of spray foam insulation on property transactions, including difficulties in selling, remortgaging, or releasing equity. Ms Clinton added:

“Obviously due to cold weather and people trying to keep their homes warm to cut down heating bills, spray foam loft insulation is something people might well consider.However, we have seen an increase in property sales falling through because of spray foam insulation and although it has been on a list of approved government measures for a number of years, the public should be aware of its long-term effect on their property and should be looking for an alternative.”

Today’s Conveyancer, the leading source of information for residential property lawyers in England and Wales, also covered the issue in a February 2024 article, Warning issued on spray foam loft insulation and recent media (including BBC’s Watchdog) and other consumer groups and industry reports also suggest that some homeowners have found it difficult to remortgage or sell properties with spray foam insulation. Thousands of other householders are in the same position. Up to 300,000 properties could be affected, some of which had government funding for the work.

A report published in March 2024 by the government’s Health and Safety Executive looked at the types of spray foam. Read it he re.

If spray foam is applied directly to roof tiles or certain underlays, condensation could cause 25% of roof timber to decay within five years. The general risks increase the further north the property is, because of colder climates. At the root of the problem are the spray foam installers who apply the foam without a full survey or appropriate expertise. Because of lenders’ caution, this is affecting other homeowners who had similar work. If installed incorrectly, spray foam insulation may lead to condensation, affecting a roof structure. Find out why some homeowners have had difficulties remortgaging or selling homes that have spray foam insulation and what they can do about it.

Westbury FM Spray Foam Removal Projects

Sonia Murton, Westbury FM Founder and MD comments: We’re being called on time and time again to remove the foam from the roof on domestic properties. These projects are often critical. The team has been tackling yet another critical project for a client, this time, removing foam from the roof of a domestic property.

“Once we remove the tiles to get to the foam, we quickly discover that the foam has also damaged many of the roof timbers. This means the team has to not only sand and treat the roof timbers to remove all residue, but also replace and repair any timbers that are beyond saving.”

These are big jobs. In these cases, the homeowner needed this work quickly to sell their property, as many mortgage providers will not lend on the house with this type of insulation.

If you are considering removing foam insulation from your loft, it’s essential to understand why properties with foam insulation can face mortgage challenges in the UK.

Look at the decaying timber on this one!

Many lenders are hesitant to approve mortgages on homes with foam insulation due to concerns about long-term effects, such as potential moisture problems and the difficulty of proper ventilation. These issues can affect the property’s value and safety.

If you’re looking to sell or refinance, you might want to remove that foam insulation to protect your investment, so if you’re in a similar situation, don’t hesitate to get in touch with our team.